Admissions-Open House Presentation

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Applying for Financial Aid
at James Madison
University
October 18, 2014
&amp;
November 15, 2014
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Objectives
To gain a better understanding of the
following:
The financial aid process at JMU
Available sources of financial aid
The scholarship application process at JMU
What happens in subsequent years
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Consult with Appropriate
Stakeholders
Talk to Those Involved in This Decision
• If parents are assisting students with paying for
college it is important students take the time to
sit and discuss details with them
• Financial aid is a long-term process
 How much debt are students willing to accumulate
 How much debt can parents afford
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Learn More About Schools
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Understand the costs of schools
Examine the types of schools
Learn about individual deadlines of schools
Try not to let cost be a large deterrent initially
 MANY colleges are willing to work with students
 If during the process you find a college is too
expensive, then be realistic about what you can afford
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Options
• Personal savings
• Investments (e.g., 529 plans, ESA’s, Mutual
Funds, etc.)
• Payment plans
• Part-time employment
• Grants (federal and state)
• Scholarships (institutional and private)
• Federal Loans (student and parent)
• Home Equity (risky!)
• Private Loans (student and parent)
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Payment Plan Example
• Average semester cost of full-time in-state tuition/fees, room/board,
and internet fee at JMU in 2014-15 is about $9,305 (fees can vary
based on courses)
• Payment Plans (generally 5 month option each semester)
• $9,305 / 5 months = $1,861 / month
• Are there items you can reduce in your budget or debt you can
eliminate before college to help “cash flow” some of this?
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Car payments
Improve food budgets
Credit card or other consumer debt
Other sacrifices to make for next 4 years to avoid long term college
loan debt (Opportunity Cost of debt)
– Community college to 4 year option
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Applying for Financial Aid
The 2015-16 Free Application for Federal
Student Aid (FAFSA) is the only
application students at JMU need to
complete to apply for all of the federal and
state financial aid offered through the
Office of Financial Aid &amp; Scholarships
That’s it! One form!
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EFC
• Completing the FAFSA provides an Expected
Family Contribution (EFC) number
• This is how much the government believes the
student and his/her family can pay for college that
year
• It is not a bill and you may pay more or less than this
depending on where the student attends school and
what aid is offered
• It is the baseline schools use to determine a
student’s “need” level at each institution
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PIN
• The student needs a PIN to electronically sign
the FAFSA
• One parent on the FAFSA (not both) needs a
PIN to electronically sign the FAFSA
• You can secure a PIN at any time by going to
www.pin.ed.gov
• If you prefer not to sign it electronically, you can
print a signature page to sign and mail to the
government after completing the FAFSA
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2015-16 FAFSA
Priority Filing Date
• March 1st, 2015
• This means your FAFSA should have
been logged in at the federal processor by
March 1st to be considered “on-time”
• You can still complete a FAFSA after
March 1st, but the funds available for
awarding at that time could be limited
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Professional Judgment
• Unexpected issues not reflected on the FAFSA
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Tuition expenses at an elementary or secondary school
Medical or dental expenses not covered by insurance
Unusually high child care costs
Job loss or unemployment
Parents enrolled at least half-time in a degree or certificate program
Roth IRA rollovers
Dependency overrides
• Contact the financial aid administrator to discuss if these items can
be considered in a Professional Judgment review
• Issues such as credit card expenses, car payments, standard living
expenses, and other “normal” daily items cannot be considered
under Professional Judgment for federal and state aid purposes
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Types of Financial Aid Available
(FAFSA Related)
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Federal Grants (Pell and SEOG)
State Grants (VGAP and CA)
University Grants
Federal Loans (Direct Loans, Perkins Loan &amp;
Parent PLUS Direct Loan)
• Federal Work-Study
Note: You will see these on a Financial Aid
Award Notice
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Types of Institutional
Financial Aid Available
• Institutional Employment
• Off-Campus Employment
• Scholarships (some may require a FAFSA be on
file)
Note: You will not see these on a Financial Aid
Award Notice
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Applying for Scholarships
Find scholarships at
www.jmu.edu/scholarships
Prospective Students:
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Freshman Scholarship Programs (Admissions &amp; University Departments)
Sarah Lanier Tabb Oliver Scholarship (Financial Aid)
Foundation Scholarships (University Departments)
Departmental Scholarships (University Departments)
Private Scholarships (Non-JMU Sources)
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Private Scholarships
• Private scholarships can originate from any non JMU
source
• You can find some private scholarship searches at
www.jmu.edu/scholarships
• If you receive a private scholarship, complete an online
Supplemental Information Sheet to inform the financial
aid office regarding your good fortune
• According to state and federal regulations, we must
consider outside sources of financial assistance when
awarding aid
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Caution!
Loan Repayment Example
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Dependent student beginning in 2015-16 and eligible for maximum Direct
Loans for 4 years (assume student accepts the loans):
– 1st year - $5,500 - no more than $3,500 subsidized (4.66%)*
– 2nd year - $6,500 - no more than $4,500 subsidized (4.66%)*
– 3rd year - $7,500 - no more than $5,500 subsidized (4.66%)*
– 4th year - $7,500 - no more than $5,500 subsidized (4.66%)*
– Total debt - $27,000 (aggregate maximum $31,000, no more than $23,000 subsidized)
Standard Repayment Plan is 10 year
– $282/month in loan payments
– $33,829 repaid over the 10 year period
– $6,829 paid in interest
– This does not include any capitalized interest, which will increase the cost
– Note: This is based on the 2014-15 rate of 4.66% (rates will differ each
year)
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Debt Consequences
• Lost Opportunity Cost:
– Loan payments will total $33,829 in 10 years, and
$6,829 of this is interest!
– $282/month invested with an average rate of return of
8% over 10 years is $51,591
– $282/month stuffed under your mattress for 10 years
is $33,840
• What could you do now to minimize your need
for loans with the goal of freeing up your income
in the future?
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Private Education Loans
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No FAFSA required
Self-Certification form required
Credit based products
Often require a co-signer, who is just as liable as
the borrower
• Interest rate is often variable
• No federal protections of benefits (e.g.,
deferments, cancelations, etc.)
• Loan Comparison Chart
Home Equity
• Possible tax benefits
• Generally variable interest rate
• Eligibility could be for more than federal
loan programs allow
• RISK!
– Making an unsecured debt secured
– Upside-down in house
529 Plans
• If a parent owns 529 College Savings Plans
(prepaid or investment), then the value of the
plans are included as a parental asset on the
FAFSA
• Parents must list the value of all the plans they
own, including any for siblings of the student
• The reason for this is the parent is the owner
(not the student) and can designate
beneficiaries at his/her discretion
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What You Can Do Now
• Review your budget
• Consider cost of living adjustments
• If your student is not a high school senior,
complete the FAFSA4caster to secure an
EFC
• Use the JMU Net Price Calculator for an
aid estimation
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Budget!
• Often overlooked…its not always about making
more money
• If you begin using a zero-based budget, you
may find you are spending money on things you
do not need now
• Can incorporate college savings into your
budget
• Get control of your money!
• Generally, you will spend less if you budget
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Zero-Based Budget
• Income minus expenses each month
equals zero
• This means you have told every dollar of
income to do something very specific
• If you stick with this for each category, you
will likely avoid unnecessary debt and
expenditures
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Cost of Living Adjustments
• Sample adjustments:
– Cell phone: If your plan costs $200/month, eliminate some options to
perhaps $100
– Dining out: If you spend $200/month dining out, cut back to $50
– Car payment: If you have a $400/month car payment, sell the car and
pay cash for something less expensive
– Total savings recouped in this scenario is $650/month that can be used
towards college
• This is merely one example and may not apply directly to you
• Looking at where you spend money and reducing some of the
“wants” can help make college more affordable
• Track your spending (every dollar) for one month…it might surprise
you
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JMU Net Price Calculator
• Get your Expected Family Contribution (EFC) by
completing the FAFSA or FAFSA4caster
• Go to www.jmu.edu/finaid
• Select “JMU Net Price Calculators” on the top
bar
• Answer the applicable questions
• Receive an estimated individual award
immediately
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Helpful Tools
www.jmu.edu/finaid
• Click on “Prospective Students”
– Click on “Freshmen Checklist”
– Click on “Financial Aid Timeline”
– Click on “JMU Terms &amp; Conditions for Financial
Aid – Consumer Information”
– Many other options available
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Communication
• The majority of communications (e.g.
letters, e-mails, etc.) sent from our office
are sent directly to students, not parents
• The primary means of communicating with
students once they are at JMU is through
their JMU e-mail and MyMadison accounts
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Questions
If you have any questions, please do not
hesitate to contact our office via one of the
following methods:
In person on the 5th floor of the Student
Success Center
By phone at (540) 568-7820
By e-mail at [email protected]
On the web at www.jmu.edu/finaid
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